Manufacture and supply of agri-tech - when things go wrong

It is not hard to predict that those British farmers who innovate will be better placed to deal with the challenges both post-Brexit and longer term. Many farmers will be keen to invest in software and hardware agri-tech to support innovation on farms - encouraged by the influence of a younger farming generation of digital natives. This provides a solid market base for agri-tech companies both large and small.

But what happens when things go wrong? As a supplier, hardware and software faults will happen, but what makes a difference (to the reputational and financial impact) is how you deal with those issues - and a good place to start is equipping yourself with some of the legal basics.

Consumers have enhanced legal rights in response to faulty goods or services, but usually if you supply to a farmer, it will be deemed a business to business transaction. The comments in the article assume there is a business to business relationship.

The first step is to identify the contractual terms - this is a legal issue in itself, and may not be as straightforward as you think. Did you use standard or bespoke terms? Were those terms incorporated into the contract? Were the purchaser's terms incorporated instead? You (or your lawyers) will need to complete a factual investigation to ascertain whether any terms were incorporated and which terms apply. You will then be able to get an idea of your rights as a manufacturer/supplier, with respect to the alleged faulty goods or services. For example, there might be a provision allowing you to repair or replace your product before having to give a full refund.

Whether or not there are any written terms related to your supply contract, legislation implies terms that goods should be of satisfactory quality and fit for purpose, and that services should be provided with reasonable care and skill. You could be in breach of these terms if your hardware/software is not up to scratch, and a breach would allow the purchaser to claim damages for losses arising in connection with the particular fault. If you put exclusions or limitations of liability into the written contractual terms, that might assist in protecting your position, however there is legislation (the Unfair Contract Terms Act) which requires those provisions to be reasonable, otherwise they can be deemed void.

Where the agri-tech is crucial or detrimental to the purchaser's key business operations, the damages which can be claimed may be substantial (and in which case, a timely resolution of the dispute will often benefit all sides).

We are always interested in meeting our agricultural contacts on site to see what you are doing to innovate your business and how we can help you. Please get in touch.

Joanne Saye is an Associate in the Commercial Dispute Resolution Team, specialising in disputes within the agricultural sector.